Posted 5 years ago on Nov. 11, 2011, 3:53 p.m. EST by looselyhuman
(3117)
This content is user submitted and not an official statement

This is the way the euro ends — not with a bang but with bunga bunga. Not long ago, European leaders were insisting that Greece could and should stay on the euro while paying its debts in full. Now, with Italy falling off a cliff, it’s hard to see how the euro can survive at all.

But what’s the meaning of the eurodebacle? As always happens when disaster strikes, there’s a rush by ideologues to claim that the disaster vindicates their views. So it’s time to start debunking.

First things first: The attempt to create a common European currency was one of those ideas that cut across the usual ideological lines. It was cheered on by American right-wingers, who saw it as the next best thing to a revived gold standard, and by Britain’s left, which saw it as a big step toward a social-democratic Europe. But it was opposed by British conservatives, who also saw it as a step toward a social-democratic Europe. And it was questioned by American liberals, who worried — rightly, I’d say (but then I would, wouldn’t I?) — about what would happen if countries couldn’t use monetary and fiscal policy to fight recessions.

So now that the euro project is on the rocks, what lessons should we draw?

I’ve been hearing two claims, both false: that Europe’s woes reflect the failure of welfare states in general, and that Europe’s crisis makes the case for immediate fiscal austerity in the United States.

The cost of abandoning the euro are so great and the problems of unwinding euro based contract and intergovernmental agreements so complicated that it cannot happen because it would be more expensive than all of the potential looming bailouts.

The obvious solutions are the same in Europe as they are in the U.S. better regulate the over speculative debt markets. there was a time when sovereign debt was sacrosanct from speculation. Today it is the basis of most big money speculation.

Get the freakin short term speculators out of the government debt business and you will restore long term investment values to sovereign debt markets. This would stabilize the markets.

I don't disagree that it will be horrific, but consider that Germany, France (and the UK, as affected as they will be) are all contingency planning for just that possibility now.

Regulation, and also expanded capability for central monetary and fiscal policy, are what's needed to keep it together. But that seems about as likely right now as the euro experiment ending altogether. I do hope you're right.

It would come about much sooner if the OWS movement were to organize politically rather than simplistically wander the streets in large crowds like some big pointless Facebook social gathering. The economic motivations are there but not the political and it is the political motivation that will focus all of the human energy on the people who caused the economic collapse and the people with the power to fix the mess.

My fears are growing that all of this great human energy will be squandered and wane in leaderlessness.

I agree that it's raw energy, but I think the power comes when we get a new batch of candidates that share our vision. It will take time. It will probably get worse before it gets better, unfortunately.